BURTON MALKIEL

MITCH TUCHMAN

Midyear outlooks are starting to trickle out of investment firms. Global investment firm T. Rowe Price just released its midyear market review and strategy which provides an interesting overview of global markets. You can read the full report here.

One recurring theme on WEALTHTRACK over the years has been how individual and institutional investors’ sabotage themselves over time. One way they do it is by chasing hot performance, buying high, and abandoning investments during market declines, selling low.

The other major way investors hurt themselves over time is by not paying sufficient attention to investment costs. Expenses matter. As one of this week’s guests, famed Financial Thought Leader Burton Malkiel tells us: “One thing I am absolutely sure about is the lower the fee… the more there’s going to be for me as the investor.”

Luckily there are products available to help us avoid both mistakes, and more are being created every day. One of them, index funds, are already a huge hit with investors and their popularity is growing by leaps and bounds.

According to Morningstar, low-cost, index based mutual funds and ETFs now have 31% of all fund assets up from just 14% a decade ago.

The other development designed to counteract destructive investor behavior is in its early stages. It is automatic investing. We have seen it in target date funds. Some advisors use software that does it in portfolios. And we are now seeing the next generation, with so called “robo-advisors”. Barron’s recently did a cover story on it called “The New Face of Financial Advice” and highlighted four robo portfolio services: Betterment launched in 2010, Wealthfront launched in 2011, and two recent entries, Charles Schwab Intelligent Portfolios and a hybrid, Vanguard Personal Advisor Services, which requires the involvement of a human financial advisor to provide what Vanguard calls “behavioral coaching,” to prevent clients from making those bad market timing decisions.

This week on WEALTHTRACK we are highlighting another service that combines low cost investing, automatic rebalancing and the human touch. It’s called Rebalance IRA and there are two major reasons I am focusing on it. It has two legendary financial thought leaders on its investment committee, with impeccable credentials, whom I have had the privilege of interviewing over the years. They both help develop, oversee and set policies for the portfolios offered to Rebalance IRA clients.

One of them, Charles Ellis has been a highly respected investment consultant to pensions, endowments and governments for decades. He is the author of numerous investment books including the classic “Winning the Losers Game” and “The Elements of Investing”, co-authored with his good friend and fellow financial legend, Burton Malkiel.

Professor Malkiel is also on the investment committee and is one of our guests this week. Malkiel is an emeritus Princeton university economics professor and author of the classic, “A Random Walk Down Wall Street,” now in its 11th edition.

We’ll also be joined by Mitch Tuchman, Managing Director and Co-Founder of Rebalance IRA, which he launched in 2013. Rebalance IRA is a low-cost, investment advisory service for accounts of $100,000 on up. As its name indicates, it is specifically for retirement accounts and it automatically rebalances their portfolios. It currently has nearly $300 million under management.

Before that Tuchman founded MarketRiders, the first online investment advisory service for do-it-yourselfers. It now oversees about $4 billion in accounts.

For many years, Tuchman has also been a technology entrepreneur and consultant to numerous Silicon Valley companies.

Malkiel and Tuchman will explain why they have teamed up to offer retirement portfolios of low-cost index funds with automatic rebalancing.

If you miss the show on public television this week, you can always watch it on our website. We also have an EXTRA interview with Tuchman available exclusively online. As always, we welcome your feedback on everything we do.

Have a great weekend and make the week ahead a profitable and productive one.

LONG TERM NECESSITY

What motivated former software entrepreneur, Mitch Tuchman to get into the investment business and develop an index-based, rebalancing model for retirement accounts? It turns out he had a very personal reason.